November 2010, Jeff Madrick, Roger Hickey, Robert Borosage, Richard Eskow, Dean Baker, Robert Kuttner and Robert Pollin
The United States continues to suffer the aftereffects of the worst economic recession since the Great Depression, triggered by a financial crisis whose causes were ignored or made worse by elite policymakers for decades. Today, more than 25 million Americans who are ready and willing can’t find full-time work. Personal wealth has declined sharply, creating an especially uncertain future for people approaching retirement age. Confidence is down for both consumers and businesses, which prevents sustained economic growth.
At the same time, largely due to the severity of the recent recession, a federal government that enjoyed record surpluses just 10 years ago now faces record deficits that are spreading alarm and confusion across the land. Moreover, this severe downturn comes after a decade that featured the worst job creation in the post-war period, declining wages for most Americans, weaker unions confronted by employer attacks on rights to organize, continued decay of basic infrastructure, an ongoing crisis in public education, record trade deficits and job loss abroad, and extreme inequality.
Despite the ongoing pain that unemployment is still inflicting on individuals and families, despite the slow growth in demand that is hurting small business, despite the wrenching budget crisis hitting most state governments, and despite the longer term decline that can no longer be ignored, the debate in Washington is now dominated by conservative cries for immediate reduction of the federal deficit. Several elite “commissions”—two privately financed, and one created by the president and Congress—have effectively shifted the attention of the media to deficits as the primary focus for public action.
One voice has been conspicuously absent from most discussion of deficits—that of the American people. Polls have shown that the public's opinion and that of many leading economists are surprisingly well aligned. The public agrees with economists who warn that deficit reduction must be performed judiciously, without restricting government's ability to create jobs and without damaging needed social programs. Both agree that that we must make investments vital to reviving America’s long-term prospects.